By Alvin Cheng-Hin Lim

Italy and the Snowball of Populism

December 4, 2016 saw a pair of major votes in Western Europe — a referendum in Italy and a presidential election in Austria. The result of the Italian referendum in particular will have implications for the wave of anti-establishment populism that began with the Brexit vote earlier this year, and which will serve to accelerate the snowball effect of populism as Western Europe undertakes a series of major elections next year.

The Austrian presidential election saw the defeat of the far-right candidate Norbert Hofer. As Shedlock (2016) points out, the relief the European liberal elites feel about this defeat of far-right populism is doomed to be “short-lived,” as Hofer’s far-right Freedom Party is “highly likely to come out on top” in the parliamentary elections which have to be held before September 2018. Should the Freedom Party do as well in these elections as the pollsters expect, it could become “Austria’s largest political party … That could see the party’s leader, Heinz-Christian Strache, become the country’s next chancellor” (Atkins and Beesley, 2016). Indeed, the “sense of relief” felt by the Eurocrats in Brussels — capital of the European Union (EU) — that Hofer’s defeat had momentarily dulled the momentum of the “far-right candidates in the Netherlands, France and Germany in elections next year,” must have quickly ended with the announcement of the results of the Italian referendum.

The Italian referendum had been organized to determine public support for Prime Minister Matteo Renzi’s proposed reforms to the constitution which would “cut red tape and make it easier for companies to do business” (Fidler, 2016). As The Economist explains about these proposed reforms:

“Their aim is to make Italy, which has had 63 governments in the 70 years since the birth of the Republic, a more governable country. The mayfly-like lifespans of Italian governments is not the sole reason that they find it impossible to implement their programmes. The two legislative chambers have equal powers, so bills must go between them until they are approved in identical form. The constitutional-reform bill would drastically curb the power of the Senate. Another reason it is so hard to bring about change is that central and regional governments have overlapping responsibilities. The reform would tackle that too.” (“Why is Italy’s,” 2016)

However, Renzi made a “strategic blunder” when he “said earlier this year he would resign if the vote went against him.” This “created an opportunity for voters to register a protest against his left-right coalition and, in particular, its failure to revive the economy.” Indeed, Renzi’s pro-reform campaign found itself unable to counter “heavy opposition in the south and other regions marred by high unemployment levels,” and the landslide 20-point success of the “No” vote prompted Renzi’s resignation (Sims and Aru, 2016; Horowitz, 2016; “Why is Italy’s,” 2016).

The eurozone could also be
impacted by the “No” vote through the possible collapse of the crisis-hit
Italian banking system and the subsequent financial contagion across the
eurozone.

The success of the “No” vote represents a major win for former comedian Beppe Grillo’s Movimento 5 Stelle (M5S), also known as the Five Star Movement. While M5S is a populist movement, it does not position itself on the political left-right spectrum, but is instead “anti-establishment, Eurosceptic, anti-immigration and pro-green.” Recent polls suggest that M5S is now “the most popular opposition party in Italy, and it looks well-placed to make a bid for power if a snap election is called,” as is one of the possible scenarios following Prime Minister Renzi’s resignation (Colson, 2016). M5S seeks “a nonbinding referendum on Italy’s membership in the euro, an end to EU-mandated government-spending limits and income guarantees for all citizens,” and should it form the next government, it would be in a position to organize referendums on not just Italy’s exit from the eurozone but also the EU (Fidler, 2016; “Italy’s 5 Star,” 2016). As Münchau (2016) warned earlier this year:

“An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period. It would probably lead to the most violent economic shock in history, dwarfing the Lehman Brothers bankruptcy in 2008 and the 1929 Wall Street crash.”

The eurozone could also be impacted by the “No” vote through the possible collapse of the crisis-hit Italian banking system and the subsequent financial contagion across the eurozone. Experts had warned before the referendum that a “No” vote could lead to the failure of up to eight Italian banks; the negative public impact of such bank failures in turn could encourage aggrieved Italians — especially those who have lost or who will lose their savings in the unfolding banking crisis — to vote to leave the eurozone and possibly even the EU (Giuffrida, 2016; Maley, 2016; Sanderson, 2016).

The poignant White House photo of the day for April 25, 2016 shows US President Barack Obama with then-British Prime Minister David Cameron, German Chancellor Angela Merkel, French President Francois Hollande, and Italian Prime Minister Matteo Renzi. As of December 2016, just eight months later, President Obama is poised to be replaced with President-elect Donald Trump; PM Cameron has resigned following the Brexit vote; President Hollande has announced he will not be seeking re-election in France’s upcoming general elections; and PM Renzi has just resigned. This leaves Chancellor Merkel, and even she faces a challenge from the far-right in next year’s general elections in which she hopes to win a fourth term as Chancellor.

The far-right will seek electoral success next year not just in the French and German elections, but also in the Netherlands, where the populist Freedom Party is currently leading in the polls (Fidler, 2016; Lim, 2016a; Lim, 2016b; Van der Galien, 2016). The successes of Brexit, Trump, and now M5S have all accelerated the snowball effect of the populist movement in the West, and the snowball effect will continue to accelerate with each new populist victory. The threat from Turkish President Recep Tayyip Erdoğan in late November — following the European Parliament’s call for a freeze in the negotiations for Turkey’s accession to the EU — to allow the estimated 3 million refugees currently held in Turkey to cross into Europe, is one of the major external factors that could further accelerate this snowball, as the growing anti-immigrant sentiment across Europe is a key driver for the growth of its populist movement (Lynch, 2016).

In his famous account of Paul Klee’s Angelus Novus, Walter Benjamin (1940) writes of the Angel of History who gazes at the catastrophe of the past while the storm of progress “drives him irresistibly into the future.” The populist victories of 2016 which could snowball into election victories for the far-right in the Netherlands, France, and Germany next year, and which could in turn be followed by the collapses of the eurozone and the EU, represent troubling additions to the catastrophic “rubble-heap” of history which Benjamin’s angel is doomed to gaze unceasingly at.

Benjamin, W. (1940). On the Concept of History (A. Blunden, Trans.). Retrieved from https://www.marxists.org/reference/archive/benjamin/1940/history.htm

Colson, T. (2016, December 5). ‘Italy's Trump’: This is what the Five Star Movement is all about. Business Insider. Retrieved from http://www.businessinsider.com/what-is-italy-five-star-movement-beppe-grillo-trump-farage-2016-12

Giuffrida, A. (2016, December 4). Why Italians are so angry ahead of Europe’s most important vote since Brexit. The Independent. Retrieved from http://www.independent.co.uk/politics/italy-referendum-result-when-live-updates-renzi-who-will-win-a7454976.html

Van der Galien, M. (2016, November 27). Geert Wilders on track to become next Prime Minister of the Netherlands. PJ Media. Retrieved from https://pjmedia.com/trending/2016/11/27/geert-wilders-on-track-to-become-the-netherlands-next-prime-minister/

About The Author

Alvin Cheng-Hin Lim is a research fellow with International Public Policy Pte. Ltd. (IPP), and is the author of Cambodia and the Politics of Aesthetics (Routledge 2013). He received his Ph.D. in Political Science from the University of Hawaii at Manoa, and has taught at Pannasastra University of Cambodia and the American University of Nigeria. Prior to joining IPP, he was a research fellow with the Longus Institute for Development and Strategy.